The Impact of Geopolitical Risks on the ESG Performance of Chinese Multinational Enterprises: The Moderating Role of Firm-Specific Advantages and Country-Specific Advantages

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Pubblicato in:	Sustainability vol. 17, no. 23 (2025), p. 10748-10773
Autore principale:	Guo Zijing
Altri autori:	Liang Yutian, Yang, Ruilin, Zhang, Jie
Pubblicazione:	MDPI AG
Soggetti:	United Nations > UN United States > US China Environmental social & governance Geopolitics Energy industry Sustainable development Global economy Carbon Foreign investment Trade disputes Multinational corporations Political risk Globalization
Accesso online:	Citation/Abstract Full Text + Graphics Full Text - PDF
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Descrizione
Abstract:	Geopolitical risk (GPR) poses a significant obstacle to the achievement of sustainable development goals, yet its nuanced impact on the environmental, social, and governance (ESG) performance of multinational enterprises (MNEs) remains insufficiently examined. This study explores the influence of GPR on ESG performance by utilizing a comprehensive dataset of 12,699 subsidiaries of Chinese MNEs. The empirical results reveal an inverted U-shaped relationship between GPR and ESG performance: at moderate levels of geopolitical risk, firms tend to proactively improve their ESG practices as a risk management strategy. However, as GPR intensifies beyond a certain threshold, this approach loses its effectiveness, leading to deteriorating ESG outcomes. Further investigation uncovers the moderating roles of firm-specific advantages (FSAs) and country-specific advantages (CSAs). Robust FSAs equip firms with a greater capacity to uphold ESG standards under rising geopolitical uncertainty, while high CSAs strengthen subsidiaries’ incentives to engage in ESG activities to buffer against external political threats. Subgroup analyses demonstrate that service-oriented MNEs, state-owned enterprises, and subsidiaries operating in high-income countries are particularly susceptible to the negative consequences of heightened GPR. By shedding light on the complex interplay between geopolitical risk and corporate sustainability, this study extends the ESG literature and provides practical implications for researchers, corporate strategists, and policymakers aiming to foster resilient and responsible global business operations.
ISSN:	2071-1050
DOI:	10.3390/su172310748
Fonte:	Publicly Available Content Database